Gartner: $100 Laptop is a Pipe Dream, for Now

In 2005, MIT's Nicholas Negroponte tried, and failed, to develop a laptop that could be sold for $100. Three years later, analyst group Gartner says that the industry will have to wait another three years to hope to achieve it.

In 2005, MIT's Nicholas Negroponte tried, and failed, to develop a laptop that could be sold for $100. Three years later, analyst group Gartner says that the industry will have to wait another three years to hope to achieve it.

The problem, Gartner warned, is that price is seen as the overarching problem that needs to be solved. And it shouldn't be.

"The economic benefits of IT literacy in emerging markets are currently driving the push for the $100 PC but there are many open questions that remain," said Annette Jump, research director at Gartner, in a statement. "These include determining the relevant hardware specifications, power availability, availability and cost of Internet connection, as well as providing adequate finance and payment options for emerging markets where funds may well be extremely limited."

Soon after Negroponte launched the One Laptop Per Child project, the group designing the OLPC started slowly backing away from their targets. Oddly enough, the OLPC group saw the display as a critical obstacle. But by Oct. 2007, the "$100 laptop" had become a $200 machine.

The $100 laptop will not be a realistic target for the next three years, according to Gartner, Inc. Analysts said that while education was the initial target audience for low-cost mini-notebooks, all current versions cost notably more than $100 and prices are unlikely to fall significantly during the next two to three years.

Gartner warned that while it is important that prices continue to come down, companies that become too focused on breaking the $100 barrier could be distracted from addressing other issues surrounding mini-notebooks.

The problem, according to Gartner's Jump, is that increased demand for the devices, along with declining component prices, could potentially reduce prices by 10 percent to 15 percent in the next two to three years. However, packaging, assembly and software costs are likely to remain the same. Without any price flexibility there, Jump said, the $100 target would be difficult to achieve.

Still, there is the potential for mini-notebooks, such as the Eee PC, or MSI Wind, to make an impact. "We expect to see increased product innovation in the PC market during the next few years," Jump said. "Mini-notebooks will create opportunities to reach many buyers across all regions, both in mature markets as additional devices, and in emerging markets as PCs."